The shift towards smaller, frequent orders in Australian eCommerce and positioning supply chains as strategic enablers

eCommerce in Australia is undergoing rapid growth, with the sector expected to reach a market volume of $90 billion by 2029. In addition to this growth comes a shift in retailers' order fulfilment profile, moving away from building few large orders for stores, towards handling smaller, more frequent orders for online customers. This trend presents both opportunities and challenges for local retailers, who must now adapt their supply chains to meet the growing demand for fast and efficient delivery.

As online shopping continues to rise, retailers are grappling with how to balance customer service expectations with the operational complexities of fulfilling numerous small orders.

Why Are Smaller, Frequent Orders on the Rise?

One of the key drivers behind the surge in smaller orders is Australia's high smartphone usage and the growing familiarity with mobile-first shopping interfaces, all of which encourage more spontaneous buying behaviours. Streamlined checkout processes, saved payment details, and features like Apple Pay and Google Pay reduce the friction involved in making a purchase. As a result, consumers are less inclined to wait and consolidate purchases into a single, large order. Instead, they buy on the spot, leading to an overall increase in order frequency even if each transaction is smaller.

The logistics landscape in Australia has also matured significantly, with courier networks, local fulfilment centres, and on-demand delivery services (like Uber Eats and DoorDash expanding into grocery and retail deliveries) making smaller, more frequent deliveries possible. With improved infrastructure and technology, retailers can accommodate frequent small shipments without excessively driving up operational costs. For instance, companies like Needly are now influencing how often people shop online by offering grocery deliveries across Sydney in as little as 20 minutes, with no minimum order value. This improved last-mile capability makes it practical—and increasingly normal—for consumers to order smaller quantities as needed.

The Challenges Facing Local Supply Chains

This shift toward smaller, frequent orders creates significant challenges for local supply chains. First and foremost, it increases the need for operational agility. Retailers must be able to process and deliver smaller orders at a much faster pace, often within hours (or much less in the case of groceries) of the order being placed. The more frequent these orders, the more pressure there is on logistics to keep inventory moving quickly and efficiently.

Frequent smaller orders also mean more pressure on inventory management. Retailers need to ensure that their warehouses or small/dark stores are consistently stocked with fast-moving items, requiring more frequent replenishment from central distribution centres (CDCs). The traditional supply chain model, designed around bulk deliveries and larger order sizes, must now adapt to handle the complexity of unit picking and just-in-time restocking.

This trend also puts a strain on retailers' bottom lines. While consumers enjoy free shipping and fast service, the cost of fulfilling these frequent small orders can add up for businesses. Without the right automation and optimisation in place, this could cut into profitability, especially as local retailers face competition from global eCommerce giants like Amazon, Shein and Temu.

How Local Supply Chains Are Adapting

To meet the growing demand for smaller, frequent orders, Australian retailers must rethink their supply chain strategies. Automation is playing a critical role in helping supply chains to adapt, with many international retailers turning to advanced technologies to improve their logistics processes.

• Multishuttle Goods-to-Person (GTP) Systems:

With exceptional throughput capabilities, this solution offers the highest pick rates among all GTP systems, with pick rates exceeding 600 order lines per picker. Retailers in Australia, like AS Colour, are turning to automation solutions like Dematic's Multishuttle GTP systems to enhance their fulfilment efficiency. In AS Colour's premier distribution centre, the system stores more than 55,000 totes and achieves up to 1,500 picks per hour, significantly streamlining both online and in-store fulfilment operations.

• AutoStore:

An ultra-high-density automated storage GTP solution that uses robots to retrieve products from a compact cubic grid. AutoStore is ideal for optimising space and increasing accuracy, especially in operations with limited floor footprint. Retailers such as Benetton have adopted AutoStore technology to optimise their logistics hubs. In Benetton's eCommerce fulfillment facility, the system reduced storage space by 85%, while dramatically improving picking accuracy.

• AMR Bin-to-Picker Systems:

Autonomous Mobile Robots (AMRs) are GTP systems where robots retrieve stored products and deliver them to picking stations. These systems offer flexibility, scalability, and accuracy, with the ability to pick up to 400 order lines per hour per picker, making them ideal for handling fluctuating order volumes. Radial's logistics centre in the Netherlands illustrates the power of Dematic's AMR systems, processing up to 12 million units annually. The scalability and flexibility of AMRs enable Radial to manage fluctuating demand, including the recent rise in smaller, frequent orders, without compromising operational efficiency.

• Crossbelt Sorters:

These high-speed, high-accuracy sorting systems provide precise product sorting to various destinations, including stores and online orders, making them ideal for managing the complexity and volume of smaller, frequent orders. Global fashion retailer Zara depends on cross-belt sorters in its distribution centres, which can handle over 80,000 items per hour. These Dematic systems allows Zara to meet the growing demand for fast fulfilment of smaller orders while ensuring both speed and accuracy, essential for maintaining competitiveness in the fast-paced retail environment.

Advanced warehouse automation solutions help retailers scale their operations without significantly increasing labour costs. This is crucial for maintaining profitability in a market where frequent small orders can otherwise increase operational expenses. Minimising labour also avoids congestion, which can negatively impact inventory management, operational efficiency, and picking accuracy.

Adapting to Thrive in a Competitive eCommerce Landscape

As Australian retailers increasingly handle smaller, more frequent purchases, their supply chains must adapt quickly. The combination of strategic small and dark store placements and advanced automation technologies are helping retailers meet this demand while maintaining efficiency and profitability. In an evolving market where price, speed and service are key differentiators, the ability to process smaller orders rapidly and accurately at the lowest cost will be crucial for future success.

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